5 Reasons India Needs a Green Power Purchasing Group

The Green Power Market Development Group launched this week in Bangalore, India. Photo credit: Flickr/Photon Energy

With more than 400 million of its 1.2 billion citizens without access to electricity, India needs extensive energy development. A new initiative aims to ensure that a significant portion of this new power comes in the form of renewable energy.

The Green Power Market Development Group

Today, WRI and the Confederation of Indian Industries (CII) launched the Green Power Market Development Group (GPMDG) in Bangalore, India. The group will help boost the country’s use of renewable energy like wind and solar power.

The public-private partnership brings together industry, government, and NGOs to build critical support for renewable energy markets in India. For starters, the group will connect potential industrial and commercial renewable energy purchasers with suppliers. A dozen major companies belonging to a variety of sectors—like Infosys, ACC, Cognizant, IBM, WIPRO, and others—have already joined the initiative and have committed to explore options for increasing their use of renewable energy.

The group also aims to make India’s clean energy development more mainstream. Green power buyers and generators in India currently face policy and regulatory barriers—such as high transmission costs and extensive approval processes. Through the GPMDG, the private sector will be able to work constructively with government agencies to instigate the types of renewable energy policies that will spur greater clean energy development.

5 Reasons India Needs a Green Power Purchasing Group

Currently, 400 million of India’s citizens lack access to electricity. And, as this past summer’s blackouts made evident, even those who do have access don’t necessarily have reliable access. Industries suffer from an unreliable power supply and supplement their grid-based electricity with unsustainable and expensive diesel generators.

Given this situation, India requires massive energy development in the coming years. But it’s important to ensure that this development creates benefits for both people and the planet.

India’s energy landscape makes it ripe for exactly the kind of industrial purchasing partnership that the GPMDG represents. The initiative can improve India’s electricity situation by:

Building demand. Many innovative financing and contracting methods for renewable energy are being developed in India, but are yet to be widely used. By creating a “pipeline of demand” from companies who are committed to increasing their use of renewables, the GPMDG can actively demonstrate new approaches to the market.

Scaling new models. The GPMDG will share “lessons learned” from testing new contracting approaches for renewables to allow these practices to be widely replicated across India (and beyond). The group will also promote information sharing between buyers, allowing for more informed decision-making on their purchasing practices.

Creating a platform for buyers and sellers to engage. Through the GPMDG, renewable energy developers can engage with a larger group of committed industrials at once, helping to reduce transaction costs and provide benefits to all parties.

Improving the regulatory landscape. Through its experiences, the GPMDG can provide electricity regulators with important, road-tested insights into how the regulatory landscape can be improved to enable greater consumption of renewable energy.

Promoting cleaner, competitive sources of energy. The GPMDG’s activities can help spur more renewable energy projects, allowing the electricity capacity gap in India to be filled with cleaner, competitive sources of electricity.

The History and Future of Green Power Purchasing

India’s GPMDG is based on a similar program that WRI successfully led in the United States in recent years. The U.S. GPMDG helped bring more than 15 leading companies together to support more than 1,000 MW of renewable energy projects—an amount of power equivalent to that of one large, coal-fired power plant.

WRI and CII hope the GPMDG India will demonstrate at least two new contracting approaches for renewable energy over the next year, showing how renewable energy can be attractive for commercial and industrial companies.

India is an excellent market for the GPMDG, and WRI and CII intend to expand the program to other cities beyond Bangalore. With a culture of innovation and a group of companies willing to lead on green power procurement, we are excited about the positive impacts this group can have on the renewable energy markets in India—and around the world.